Newsflash: Equal pay audits on the way…

What do we already know?

Way back in May 2012 we first told you about the Enterprise and Regulatory Reform Bill (ERRB), which later became an Act (ERRA). This Act proposed to make it compulsory for organisations which lost an equal pay claim to carry out an equal pay audit of its staff in order to highlight discrepancies in pay between the genders.

In April 2013 when ERRA received royal assent, it gave the Government power to make regulations to require Tribunals to order the above audit. In May 2013, the Government launched a consultation seeking views on how the new rules should work.

What’s new?

From 1 October 2014 Tribunals will be able to order employers who have been found in breach of equal pay law to carry out equal pay audits. This will only apply in respect of equal pay claims presented on or after that date.

The new laws were set out in draft regulations which the Government published last month.

There will be exemptions for employers who have carried out equal pay audits in the previous 3 years and micro businesses (fewer than 10 employees). An audit under the regulations as drafted would involve the publication of relevant gender pay information; identify any differences in pay between men and women and the reasons for those differences; include the reasons for any potential equal pay breach identified by the audit; and set out the employer’s plan to avoid breaches occurring or continuing.

The regulations give the Tribunal the power to impose a £5,000 fine on an organisation who fails to undertake an audit when ordered.